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Statutory financial statements

In Luxembourg, companies are classified in several categories, mainly based on size, to determine the obligations for preparing and filing financial statements:

Small and medium size companies Large companies
  • Small companies do not need an external independent auditor (“Réviseur d’entreprise agréé”)
  • According to the article 35 of the law of 10 August 1915, small and medium size companies may draw up an abridged balance sheet showing only those items preceded by letters and roman numerals in Article 34 of the law of 10 August 1915,
  • Small and medium size companies may derogate from the layouts prescribed in Article 46 of the law of 10 August 1915 as regards profit & loss account’s layouts (option to present an abridged P&L),
  • Small and medium size companies shall be authorised to prepare abridged notes to their accounts without all the information required in Article 65 of the law of 10 August 1915.
  • Small and medium size companies are not compelled to prepare an annual management report.

Under the Law of 19 December 2002, a company is considered large if :

  • balance sheet total: 4.4 million euros (EUR 4,400,000)
  • net turnover: 8.8 million euros (EUR 8,800,000)
  • average number of full-time staff employed during the financial year: 50

 

These criteria are computed by entity, except when the company is part of a group which is legally required to prepare and publish consolidated financial statements, in which case, they are computed on a group basis. An entity is considered small only if it did not exceed the above criteria during 2 consecutive financial years.

The annual accounts shall be drawn up clearly and in accordance with the provisions of the Law of 19 December 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings. In the balance sheet and in the profit and loss account, the headings prescribed in Articles 34 and 46 must be shown separately in the order indicated. A more detailed subdivision of the headings is permitted provided that the layouts are complied with.

Companies must have their annual accounts audited by one or more registered auditors appointed by the general meeting amongst the members of the Luxembourg Institute of Registered Auditors (Institut des réviseurs d’entreprises).

Companies which on their balance sheet dates do not exceed the limits of two of the above criteria are exempted from the obligation to have their annual accounts audited.

Companies operating in the financial sector or the insurance sector must have their annual accounts audited whatever the size and the legal form of the company.

La société en nom collectif (general corporate partnership / unlimited company), la société en commandite simple (limited corporate partnership) and la société cooperative (Co-operative society) are exempted from the obligation to have their annual accounts audited whatever the size of the company.

Those undertakings referred to by Article 8 of the Commercial Code, with the exception of those specified in Article 13 thereof, shall file their annual accounts with the Commercial and Companies Register, duly approved, within the month of their approval and no later than seven months after the end of the financial year of reference; all undertakings shall file a trial balance in accordance with the procedure laid down by Article 12 of the Commercial Code with reference to the statutory minimum standard chart of accounts - plan comptable minimum normalisé; for sole traders and partnerships the filing deadline shall be within one month of its approval and no later than seven months after the end of the calendar year of reference.

In Luxembourg, audit of financial statements are conducted in accordance with International Standards on Auditing.

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